Wednesday, March 1, 2017

Incentivising Electric Cars in South Africa

What are some of possible measures the government could take to incentivise electric vehicles in South Africa. Here are a few I can think of:
  • Drop the 25% import tax on electric vehicles. At the moment gas powered vehicles only pay 18% import tax. Ideally the import tax should be cut altogether on electric vehicles for a while and as sales increase the tax rate can gradually climb back up to the 18% rate that petrol & diesel vehicles get taxed at.
  • Encourage local motor vehicle manufacturers and distributors who have an EV in their range but don't offer it for sale in South Africa right now, to start selling it locally.
  • Lower toll-road fees for electric vehicles.
  • Offer some sort of compensation to businesses who install charging points for their customers.
  • Allow electric vehicles to drive in bus lanes.
Most of these points have probably been mentioned by someone or another in the past. Many of the measures are in use in various other countries to help speed up the adoption of electric vehicles.

Electric vehicles will be the future of road transport. In three or four years time, when the price of electric vehicles gets down to that of a comparative gas vehicle, sales of EV's will sky rocket. Most people then won't be buying them to save the environment or because of the technology. They will buy them because it will make economic sense to buy them. The initial purchase price will be the same as a gas powered vehicle but there will be huge long term savings with an electric vehicle, namely lower fuel & maintenance costs. The change will come from the ground up, people choosing what's best for their finances. It will be important though that when that time comes that there is the necessary infrastructure in place to handle the surge of new electric vehicles. If there aren't enough public places with charging points, we could end up with many frustrated motorists. This is why, maybe more importantly then incentivising EV sales, the implementation of electric vehicle infrastructure is more urgent. That could be the real challenge facing South Africa and the adoption of electric powered transport.

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